SAN ANTONIO - Valero Energy Corp. Chairman and Chief Executive Bill Greehey said Hurricane Rita’s impact on U.S. crude oil production and refining could be a “national disaster.”

“If it hits the refineries, and we’re short refining capacity, you’re going to see gasoline prices well over $3.00 a gallon at the pump,” Greehey said in a Tuesday night interview.

Valero became the largest U.S. refiner earlier this year when it completed the purchase of Premcor Inc. Valero operates refineries in Port Arthur, Houston, Texas City and Corpus Christi, Texas -- all potentially in the path of Hurricane Rita.
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“It’s going to be coming across the (U.S.) Gulf (of Mexico),” Greehey said. “There’s a lot of oil platforms, oil rigs, (natural) gas platforms, gas rigs. It could have a significant impact on supply and prices, and then, depending on what it does to the refineries, there are still four refineries that are shut down. So this really is a national disaster.”

Refineries in Houston and Texas City process 2.3 million barrels of crude oil or 13.5 percent of daily U.S. refining capacity. The Beaumont-Port Arthur, Texas, refineries account for another 1.1 million barrels in refining capacity.

Based on Rita’s current forecast path Texas City, Houston, Port Arthur and Beaumont could be lashed by high winds and heavy rains from Rita’s northeast quadrant, which often packs the highest winds in a hurricane.

Valero announced on Wednesday morning it would reduce production at its Houston and Texas City refineries to prepare for the hurricane.

“You’ve got refineries that will start shutting down in anticipation of the hurricane, and then if any of them have permanent damage, we’re going to be dependent on imports. Following Katrina, this is really serious.”
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09-21-2005, 02:26 PM

ct2

Following Katrina, this is really serious.”

No even before IVAN: it's all BS. They knew they were building those refineries in the gulf, they knew they built those platforms out there. They built them to withstand a hurricane , they generate their own power, they can repair their own damage, we are just suckers that believe every excuse they come up with

09-21-2005, 08:51 PM

flange

when it comes to refiners, they just are not to be trusted. there were two large yards around here that were adjacent to each other. these were operated by two different co's then became one. the smaller of the two was in bad shape, and had many pitfalls. the larger of the two was pretty decent, relatively safe, and had several newer units that were in excellent working order. the good yard was slowly closed due to refiners having "too much capacity". during the downphase, there was piping interconnected so that the larger plant would now be just a tank farm. this would allow them to overproduce and also to reduce the stress of shutdown to reconfigure the plant. the theory was that shutdowns could go from six weeks of seven tens or whatever to a leisurely pace of forty hours by utilizing the "extra capacity". in the meantime they dismantled the better plant. now all of the sudden there is a shortage of capacity here and elsewhere. thankfully we have an oil man as president to reap some of the profits and to act really dumb so that there isnt a revolution.

09-21-2005, 08:59 PM

midhvac

The only thing that would be a disaster for the refiners would be something they can't pass on the cost of, i.e.: